Best Credit Cards for College Students in 2017

Credit cards that help college students build credit and manage expenses

College is the place where students learn some of life’s most valuable lessons. This is especially true when it comes to managing one’s own finances — and that includes using a credit card.

For a student starting out, a credit card is indispensable for building up that much-needed credit score. The best credit cards let college students with limited credit history improve their scores which, in turn, makes buying a car and renting an apartment easier. Mastery of the credit card can also open the way for students to upgrade to even better credit cards (and better terms) down the road.

For 2017, the Discover it® for Students continues to be our top pick.

Apply Now on DiscoverCard.com's secure website

When you’re first starting out with a credit card, it’s easy to make mistakes, which is why Discover it® for Students is our top pick. The low rates and lack of fees alone make this the perfect starter credit card for students, but that’s not all. Say you forget to make a payment on your credit card. It happens to the best of us, and Discover is incredibly forgiving to new cardholders. They will waive the fee on the first late payment, and there are no APR hikes for paying late. It’s also worth mentioning the rewards students will have access to with this card, which include 5% cash back on rotating categories. Discover will even match all that cash back at the end of the first year, effectively doubling your rewards potential.

Of course, credit cards are not a one-size-fits-all situation, and the Discover it® for Students might not be ideal for everyone. That’s why we’ve put together this rundown of the best student credit cards so you can find the card that’s perfect for you. Explore our top picks for 2017, and apply online in minutes.

The Simple Dollar’s Picks for the Best Credit Cards for College Students

Discover it® for Students

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College can be overwhelming at first, and it’s important to have a credit card that doesn’t add any extra anxiety with its terms. Discover it® for Students accomplishes this while also being quite forgiving to a student’s early financial mistakes. With this credit card, students don’t have to worry about annual fees, and there is no late fee for the first late payment.

Discover it® for Students is also perfect for helping students earn a little extra on their purchases. In addition to the 5% cash back earned on purchases made in rotating categories (and 1% on other purchases), there is also a Good Grades Rewards program. Just like it sounds, students who maintain a 3.0 or higher GPA can receive $20 cash back each school year. Use this card to build positive credit — and earn high-rate cash back, too! And, if that weren’t enough, you can get your FICO® Credit Score† for free on monthly statements, on mobile and online. Useful for watching your blossoming credit score grow!

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Card Highlights Provided by Discover:
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • Earn 5% cash back in rotating categories each quarter like Amazon.com, restaurants, ground transportation and more, up to the quarterly maximum each time you activate.
  • Good Grades Rewards: $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & your FICO® Credit Score for free on monthly statements, on mobile and online.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 13.99% - 22.99%.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
  • Earn 5% cash back purchasing books and other school supplies from bonus categories like Amazon.com.
  • Keep your GPA up to a 3.0 or higher to earn $20 cash back during the school year.
  • See where your money is going and improve your spending habits with Spend Analyzer.
  • Watch your credit score grow with your free monthly FICO® Credit Score†.
  • Take the card with you if you’re doing a year abroad, as there are no foreign transaction fees.
Rewards programs can help a student out when money is tight, and Discover it® for Students features some incredible opportunities to earn cash back. Students can earn 5% cash back on purchases spent in rotating categories such as Amazon.com, restaurants, ground transportation, and more, plus 1% on everything else. Additionally, Discover will match all cash back you’ve earned at the end of the first year for a nice bonus.
Discover it® for Students is our top pick for its flexibility, lack of fees, and generous rewards program. Its $20 bonus for students who maintain a 3.0 GPA may not sound like much, but it is an extra bonus for students who focus on their studies. The rewards program can also be a tremendous benefit to students when money is a little tight and, depending on the quarterly categories, could be useful in purchasing school supplies (or other frequent purchases).

Discover it® chrome for Students

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On the surface, there does not seem to be much difference between Discover it® chrome for Students and Discover it® for Students. However, the difference lies in your individual spending habits and the cash back rewards categories you find most valuable.

Similar to the Discover it® for Students, you can receive cash back for good grades, and your cash back will never expire. With the Discover it® chrome for Students, you’ll earn 2% cash back on gas and restaurants, on up to $1,000 each quarter (plus 1% on other purchases). This allows a little more control over your rewards categories than the Discover it® for Students, which offers 5% cash back in rotating categories that change quarterly. If you drive to class daily or often grab meals at restaurants, the Discover it® chrome for Students can offer serious rewards over time.

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Card Highlights Provided by Discover:
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter - no sign-ups needed. 1% cash back on all your other purchases.
  • Good Grades Rewards: $20 cash back each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & your FICO® Credit Score for free on monthly statements, on mobile and online.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 13.99% - 22.99%.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
  • Get 2% cash back when you use this card to dine out with classmates or fill up your gas tank (up to $1,000 in combined purchases each quarter).
  • Receive $20 for each school year your GPA is 3.0 or higher (for up to five years).
  • Misplaced your card? Protect your account using the Freeze It® on/off switch.
  • Take advantage of the free monthly FICO® Credit Score† and keep track of your blossoming credit score.
Maximizing your rewards potential all comes down to your spending habits. As a college student, you might find yourself going out to restaurants or commuting to and from campus. If that’s you, the 2% cash back you can receive from participating restaurants and gas stations would definitely be a plus. If you don’t spend much on gas or restaurants, check out the Discover it® for Students for similar cardmember benefits — and 5% cash back in rotating categories.
While Discover it® chrome for Students is very similar to Discover it® for Students, there are a few differences in each card’s rewards program. Your spending habits will ultimately determine which of these cards is right for you. If you do a lot of driving, it’s nice to have the 2% cash back at participating gas stations – especially with today’s gas prices. Another thing to bear in mind is that all other cardholder benefits and fees are identical to Discover it® for Students.

Journey® Student Rewards from Capital One®

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Capital One® Secured MasterCard® Highlights
  • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
  • There's no limit to the amount of cash back you can earn, and rewards won't expire for the life of the account
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Pay no annual or foreign transaction fees
  • Fraud coverage if your card is lost or stolen
  • Pick the monthly due date that works best for you

As a college student, you’re largely responsible for a lot of your own expenses, like books, school supplies, food, gas, rent, and more. That’s why we recommend the Journey® Student Rewards from Capital One® for any college students out there who are learning to budget for the first time.

The Journey® Student Rewards from Capital One® doesn’t have quite as robust a rewards program as our previous mentions. However, it does incentivize responsible credit use by both boosting the 1% cash back to 1.25% (each month you pay on time!) and raising your line of credit (after paying on time for five months in a row). And depending on your spending habits, unlimited 1.25% rewards on every purchase could mean more cash back than you’d earn with higher rate rewards on select types of purchases. In addition to this, they offer the CreditWise simulator which makes it easier to chart your credit score’s trajectory. This can help students decide on when to open a new card, make a large purchase, and other financing decisions.

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  • Earn 1% cash back on all your purchases. Pay on time to boost your cash back to a total of 1.25% for that month
  • There's no limit to the amount of cash back you can earn, and rewards won't expire for the life of the account
  • Get access to a higher credit line after making your first 5 monthly payments on time
  • Pay no annual or foreign transaction fees
  • Fraud coverage if your card is lost or stolen
  • Pick the monthly due date that works best for you
  • Use credit responsibly by paying on time each month to see your 1% cash back boosted up to 1.25%.
  • Access the CreditWise program to chart the trajectory of your credit score (and make smart, financial decisions accordingly!)
  • Since there are no foreign transaction fees, this is a great card to take with you while studying abroad.
The Journey® Student Rewards from Capital One® affords students a certain amount of flexibility while also promoting responsible credit use. This card also lets you pick the monthly payment due date that works best for you, which can help you manage cash flow throughout the month. And, if you pay on time five months in a row, you can unlock access to a higher line of credit, which will make it easier to keep your credit utilization low (an important factor in your credit score).
One of the best lessons you can learn in college is how to be responsible with your money. The Journey® Student Rewards from Capital One® further drives home this lesson by incentivizing responsible credit use. Sure, a boost from 1% cash back to 1.25% doesn’t sound like a whole lot, but it gets you in the habit of paying on time — and gives you bonus cash back for your trouble. You’ll also get access to their CreditWise program, which makes it easy and free to monitor your credit score.

Citi ThankYou® Preferred Card for College Students

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College isn’t all work and no play, and the Citi ThankYou® Preferred Card for College Students understands this. With 2 points for every dollar spent on dining and entertainment (plus 1 point/dollar on other purchases), students can make the most of these rewards when they aren’t too busy studying. There’s also no annual fee, and no expiration date on or limit to the points you can earn.

The Citi ThankYou® Preferred Card for College Students also comes with Citi’s Price Rewind service. Say you were purchasing school supplies online, and you spent more money than you would have liked. If a registered item purchased online becomes available at a lower price within 60 days, Price Rewind refunds the difference. While not as flexible as some of our aforementioned student credit card, there are plenty of benefits to consider.

The Citi ThankYou® Preferred Card for College Students also offers travel insurance and purchase protection benefits that many students will find valuable. Say you just purchased some expensive school supplies only to have them stolen. If this happened within 120 days of your purchase (90 days for residents of New York), then those purchases will be covered for repairs or refunds. Included trip cancellation and interruption protection reimburse you for any out-of-pocket expenses during travel delays. All together, these cardmember benefits make the Citi ThankYou® Preferred Card for College Students stand out from the crowd.

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  • Earn 2,500 bonus points after spending $500 in purchases within the first 3 months of account opening*
  • 2,500 ThankYou® Points are redeemable for $25 in gift cards, electronics and other great rewards
  • Earn 2X Points on Dining Out & Entertainment
  • Earn 1X Points on All Other Purchases
  • No expiration and no limit to the amount of points you can earn with this card
  • Travel with ease and enjoy global acceptance with Chip Technology
  • No annual fee*
  • Go out with your classmates and spend responsibly, earning 2 points per every dollar spent on dining and entertainment.
  • Spend $500 within the first three months and receive 2,500 points.
  • Redeem your points for gift cards, cash, travel, and more.
This particular credit card should only be considered for those looking to rebuild damaged or non-existent credit histories. Not only does it feature a smaller signup bonus and rewards rate than our top pick, it also comes with a transaction fee of 3%. If are looking for an alternative with higher rewards and no foreign transaction fees, consider Discover it® for Students.
The Citi ThankYou® Preferred Card for College Students is a good fit for college students who spend their weekends eating out and looking for things to do. Used responsibly, it can help you build positive credit over time — and the 2 points earned for every dollar spent is a nice bonus. Benefits like insurance and purchase protection are the cherry on top.

Discover it® Secured Card – No Annual Fee

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For some college students, the Discover it® Secured Card is a nice and safe way to establish or restore a credit history. While it is somewhat less flexible than the other Discovery cards we have covered, it does offer 2% cash back at restaurants and gas stations. Secured credit cards are a good option for students who have a damaged credit score or have had trouble getting approved for an unsecured card. In general, secured cards have a more relaxed approval threshold, because they require a security deposit upfront.

Here’s how it works: with the Discover it® Secured Card, you’ll pay a security deposit of $200 or more, which will be equal to your credit line. A relatively small credit limit means it will be tougher to keep your credit utilization low — but used responsibly, this card can be a tool for improving your credit score. Once your score improves, you’ll be more likely to be approved for a card with an even more attractive rewards program.

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Card Highlights Provided by Discover:
  • No Annual Fee, cash back on every purchase, and helps you build your credit with responsible use.
  • A security deposit of $200 or more will establish your credit line (up to the amount we can approve). Automatic monthly reviews starting at 8 months to see if we can transition you to an account with no security deposit.
  • Reports to the three major credit bureaus. Plus, get your FICO® Credit Score for free on monthly statements, on mobile and online.
  • Earn 2% cash back at restaurants & gas stations on up to $1,000 in combined purchases each quarter. Plus, 1% cash back on all your other purchases.
  • Get a dollar-for-dollar match of all the cash back you’ve earned at the end of your first year, automatically.
  • Tools to assist you; email alerts, text reminders and 24/7 customer service.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Cashback Match™ details & other information.
  • Use this card responsibly to establish positive credit.
  • Earn 2% cash back at restaurants and gas stations on your first $1,000 in combined purchases each quarter.
  • Enroll for email alerts and text reminders to make sure you’re keeping up with your payments and spending responsibly.
The Discover it® Secured Card is relatively easy to obtain for nearly all applicants. It functions like any standard credit card, except that the amount of your security deposit is your line of credit. But if your credit score isn’t damaged, you could earn significantly greater rewards with an unsecured card like the Discover it® for Students.
This card is one of the best credit cards for people with bad credit or no credit at all. For some, it is an effective means of improving their credit score. There are also lots of tools available to help you remember to pay on time, thus helping you establish a record of on-time payments and making you eligible for other credit cards in the future.

Best Student Credit Cards: Summed Up

# Student Credit Cards Best For…
1 Discover it® for Students The biggest rewards
2 Discover it® chrome for Students Students who spend the most on eating out and gas
3 Journey® Student Rewards from Capital One® Students who want to develop responsible credit habits
4 Citi ThankYou® Preferred Card for College Students Students who spend the most on eating out and entertainment
5 Discover it® Secured Card – No Annual Fee
Students with poor or no credit

Student Credit Cards 101

We have already learned how easy it is for students to get into trouble; as Kristen Kuchar highlighted in her recent post on students’ common money mistakes, the average student leaves school with $3,000 in credit card debt.

Still, most students and parents know it is impossible to begin establishing a positive credit history without taking that risk. That’s why, for most parents and students, learning to use credit responsibly has become a priority.

Students, you must meet certain qualifications to get a credit card. Under the Credit Card Act of 2009, students ages 18-21 can qualify for a credit card if one of two things happen:

  1. A parent, guardian, spouse, or another adult is willing to co-sign
  2. You submit proof of income and financial history proving a full-time income (or even a part-time income that’s sufficient enough to pay the balance each month).

When You Need a Parent to Co-sign

If your credit history is too thin or you don’t have enough income to qualify for a card on your own, you may need a parent to co-sign for your first student credit card. This arrangement can help you in the following ways:

  • Parents with good credit can help you qualify for a card that will allow you to begin building your own positive credit history.
  • Sharing an account with a responsible parent allows you to lean on their guidance as you learn to manage credit for the first time.
  • Since both the student and the parent’s credit activity on the card is reported to credit reporting agencies, both parties can benefit from each other’s responsible use.

Co-signing Risks for Parents

There may be several benefits to having a parent co-sign for a student credit card, but there are also risks for both the parent and the student.

  • Parents who co-sign aren’t just helping their children qualify for a credit card. Co-signing also means that both parties will be held mutually responsible for all debts incurred.
  • Certain credit factors, such as high utilization, can negatively impact a parent’s credit score.
  • Shared accounts that go into default can negatively impact your credit score the same as accounts that are held privately. Both parties will also be pursued by collections.
  • The Credit Card Accountability, Responsibility and Disclosure Act, also known as the Credit CARD Act, requires students to get written permission from a parent for any credit line increase until they turn 21. After they turn 21 however, students can apply for a credit line increase without their parent’s knowledge or consent, which could increase their overall liability.

Alternatives to Co-signing

Rather than co-signing a student’s credit card application, parents can take an alternative approach by adding their adult children as authorized users to an existing credit card account. Parents then closely monitor and supervise their student’s use of this credit card, and can even “bill” students for their purchases. This offers the advantages of having a credit card in case of an emergency, while allowing parents to assist students as they learn about budgeting and credit. Being an authorized user will also add to a student’s credit history.

How Do Credit Cards Work?

A credit card actually provides a short-term loan. A less-pleasant word for a loan is debt. When you purchase lunch at a restaurant with a credit card, the credit card company pays the restaurant right away on your behalf, then gives you roughly a month to pay them back. You are legally bound to pay back that loan.

This is where the situation gets tricky. If you fail to pay your credit card balance in full each month, your card issuer has the right to charge an incredible amount of interest on the balance of money you owe. In many cases, and depending on your interest rate, that means that your $12 lunch at Applebee’s could end up costing you $15, $20, or even $30 over time. However, if a credit card is used properly, it can be an interest-free loan. You simply need to learn to pay your balance in full when you receive your credit card statement each month, or before. Even better, through rewards accumulation, you can actually be “paid” to use this loan.

Lesson: Use your credit card the same way you would use money in your bank account.

Financial Concepts Students Can Learn from Credit Card Usage

Although there are certain risks involved when you apply for any kind of credit, the pros often outweigh the cons. After all, having the opportunity to prove you are creditworthy is the only way to begin building a positive credit history, and you can’t do that without establishing credit in the first place. Even better, tiptoeing into the world of credit with a student card can teach students about some of the broader concepts surrounding proper financial management.

More than any other financial product, a credit card can teach a student about three important personal finance concepts:

  1. Cash flow
  2. Debt management
  3. Importance of credit history

Financial Concept #1: Using a credit card to manage cash flow

Cash flow is a term used to describe the act of matching up your actual spending to the cash you have on hand. Imagine your bank account as a bath tub. Think about the dollars you earn flowing into your bath tub through the spout, and the dollars you spend flowing down the drain and out the tub. In order to keep enough water in the tub, you need more water flowing into the tub than draining out.

Now imagine you have $0 in your tub and you need to buy a $5 sandwich today for lunch, but you won’t get your paycheck until Friday. A credit card can help you manage this imbalance in cash flow by paying for your sandwich today, and letting you use money to pay the credit card company 30 days from now — when you have money in your tub.

Using credit to manage your cash flow may not present a problem in itself, but it can become a slippery slope if not managed properly. If you are unable to “fill up your tub” by the time your bill comes due at the end of the month, you will be forced to carry a credit card balance into the next month. That balance will also accrue interest, which ultimately means more of your money down the drain. This idea leads to financial concept #2: debt.

Financial Concept #2: A credit card is debt

When you first start using credit, it is easy to disassociate your credit card spending with the money you have in your bank account. However, it is crucial that you remember what your credit card balance is – money you owe someone else.

With that being said, it is important to know that debt isn’t always bad. There are times when going into debt may even be beneficial, such as when you buy your first home or need to borrow money for school. Generally speaking, however, credit card debt is not beneficial debt since it usually will not improve your situation in the same ways buying a home or earning a college degree might.

It is also important to remember that any credit card debt you have will eventually accrue interest. There is currently no maximum rate a credit card issuer can charge, but it is common to see rates of more than 20%. That means that, for every $1,000 you owe, you would need to pay back an extra $200 per year.

Financial Concept #3: Credit cards help students build credit history

Financial institutions keep track of all your credit accounts, personal loans, auto loans, and home-loan transactions over the course of your life. They want to know how much you owe and the likelihood that you will pay back your loans. The compilation of this information is called your credit history. From this history, financial institutions create a credit score for you, and this score helps determine whether they will offer you a loan, such as a home loan or auto loan, and at what interest rate.

Having a good credit history is important. Not having any credit history is a negative because the lender will have no idea if you can responsibly make payments on the loan. Even if you don’t think you will be buying a home or a car for a very long time, it’s still a good idea to start building your credit history as early as possible.

If you need credit history to get a loan, how do you get a loan to start your credit history? This is the conundrum that plagues many students. A credit card is one of the best ways to start because they are relatively easy to obtain, can help you show responsibility managing cash flow and making payments on time if you use the card regularly.

How Students Get Into Credit Card Trouble

Although student credit cards can be the key to building a credit history for some students, they can quickly become a problem for students who haven’t learned to manage credit responsibly. Here are a few of the most common mistakes students make when using credit, and the implications for them:

Mistake #1: Overspending

It is easy to forget you are going into debt when you first start using credit. You simply swipe the card and go on your merry way. Unfortunately, the small purchases you don’t remember making will add up over the weeks and months. If you don’t keep track of your purchases in real-time, you may spend far more than you planned. When this happens, you can easily get whacked with an over-the-limit fee or spiral into credit card debt that becomes unmanageable.

Mistake #2: Spending just to earn more rewards

Many credit cards let you earn rewards points that can be redeemed for merchandise, cash back, or travel. It may be tempting to maximize this feature, but you should only do so with caution. The fact is, spending to earn rewards is never beneficial because your unnecessary spending often costs more than the rewards you get back.

Mistake #3: Making only minimum payments

When you carry a credit card balance into the next month, your credit card issuer will ask you to make a minimum payment. This minimum payment is usually only a small fraction of the amount you owe, which can be tempting if you are tight on cash. However, it is important to remember that the balance you carry over will accrue interest and ultimately cost you more money over time.

For example, let’s say you pay the minimum payment on your card and carry a $500 balance into the next month. If you paid $15 per month with an 18% APR, it would take you 47 months to pay your debt in full. During that time, you would pay $198.34 in interest for the privilege.

Mistake #4: Not paying your bill on time

Since your payment history is used to decide 30% of your credit score, late credit card payments are a huge step in the wrong direction. In addition to negatively impacting your score, you will also be charged a late fee that is generally somewhere between $30 and $40.

Making more than one late payment on your credit card may actually hurt your credit more than not having any credit history at all. If you opt for a student credit card, make sure to pay your payment on time every month if you want your credit score to benefit.

Mistake #5: Using convenience checks or other cash advance features

When you use your credit card at an ATM for a purchase at a store and receive cash back, or when you use convenience checks, you are triggering the cash advance feature of your card. Interest rates for cash advances are high, often around 25%, and usually start accumulating immediately. Unfortunately, many people don’t realize they are being charged so much until they receive their statement in the mail.

All these fees add up and cost you money, which is why you should avoid using these features altogether. Chances are, you have more important things to pay for than hefty interest charges or cash advance fees anyway.

Student Budget Calculator

In order to help students manage and analyze their finances, we’ve created this student budget calculator. Using this calculator, students can understand and prepare their expenses for the school year.


How Can Students Use a Credit Card the Right Way?

If you want to learn how to truly use credit responsibly, it is best to start out slow and easy. You don’t need to rush into using credit exclusively, and would probably be better off making a few small transactions each month until you feel comfortable. Here are a few more tips that might make the transition smoother:

Start small with one card and a low limit

Since the most common credit card mistake that plagues students is overspending, it might be wise to begin the process with only one card that comes with a relatively low credit limit. For example, a student credit card with a $300 or $500 credit limit offers enough credit to let you get the hang of it without offering you so much credit that you risk going far into debt.

This is also why starting with only one student credit card is also a wise choice. If you have multiple cards, it is easier to overspend and end up in credit card debt.

Make small everyday purchases, not extra purchases to get rewards

If your credit card offers rewards, don’t change your spending habits just because you have a credit card. Get used to using the card for your everyday purchases and see how you can earn points on them, not the other way around.

Understand your spending by analyzing the statement

After using your new student card for your first month, you can use the information you gain to understand your spending better. Unlike when you use cash, using credit creates a paper trail of every transaction you make. This paper trail, and the online budgeting tools the best student credit cards usually offer, make it easier to analyze your real spending and look for ways to improve it.

Online tools can also help you understand key concepts, like the difference between your current balance, minimum payment, and last month’s balance. Last month’s balance is what you need to pay every month in full by the due date to avoid interest charges.

See the graphic below:

zStudentCC-Account Summary

Pay off your balance each month

When we say “pay off your balance,” it means you need to pay the full amount you charged on your balance in the last statement by the due date. Paying your balance in full is the only way to avoid paying interest on your purchases. It is also the best way to avoid credit card debt altogether.

If you can learn to follow all of these steps all of the time, your new student credit card can help you learn to effectively manage cash flow and earn points for your everyday spending, all while building a solid credit history for the future. The best part is, by paying your balance in full every month, you can do all of this for free.

If for some reason you cannot get a parent to co-sign for your student credit card, you can also consider getting a secured credit card. The difference between a secured card and other types of cards is that, with a secured card, you are required to put down a deposit as collateral. While this situation may not be ideal, it will usually lead to better results than the alternative, which is not building a credit history at all. If you need to consider this option, check out our post on the best card cards for bad credit.

Student Credit Card Glossary

If you’re new to credit cards, it can take some time to understand the terms, conditions, rates, and fees associated with card ownership. Listed below are some of the common terms used by credit card companies that can help new cardholders better understand credit and make more informed decisions.

Annual Fee: The annual fee is a charge for using the credit card that your company applies every year. Not all credit cards have an annual fee and, fortunately, none of the top student credit cards charge an annual fee.

Annual Percentage Rate: The Annual Percentage Rate (commonly referred to as the APR) is the rate at which interest will accumulate if the credit card balance is not paid off each month. The APR is usually determined by the credit of the applicant and the current Prime Rate. The APR on student cards generally ranges from 10.99% to 23.99%. The most important thing to know is that a low APR is better than a high APR.

Introductory APR: Some credit cards will offer an introductory APR that is lower than the standard APR. In many cases, credit cards will offer a 0% introductory rate for a specified period at the beginning of card ownership. For example, two of the top student credit cards have a 0% introductory rate for the first six months. This means that interest will not accumulate on any credit balances during that time. After the introductory period is up, the standard APR will kick in.

Cash Advance Fee: The cash advance fee is a charge associated with getting cash from the credit card or taking out a loan on the line of credit. The cash advance fee for the top student credit cards is $10 or 5% per transaction, whichever is greater.

Cash Advance Rate: When a credit card is used to make normal purchases like gas or groceries, the standard APR will apply. However, when you request a cash advance, a different interest rate will be applied. The cash advance APR on many credit cards for students is roughly 25%. Cash advances are a nice convenience, but you should only use them when no other options are available.

Balance Transfer Fee: The balance transfer fee is a charge applied when you move your balance from one credit card to another. This fee is typically either a set dollar amount or a percentage of the amount transferred. The balance transfer fee on the best credit cards for students is $5 or 4% of the transaction amount, whichever is greater.

Balance Transfer APR: When you transfer a balance to a new credit card, the APR for that transaction is called the balance transfer APR. The balance transfer APR is often higher than the standard APR. With student cards, the balance transfer APR ranges from 10.99% to 23.99%. Some credit cards offer introductory balance transfer rates that work just like a standard introductory APR, but they will only be applied to the balance of the transfer.

Late Payment Fee: The late payment fee is the charge applied when a payment is not made before the deadline. These fees vary, but with student credit cards they can reach $35 to $40.

Default Penalty Rate: The default penalty rate is the interest rate applied to a portion of the credit balance (or in some cases the entire balance) when a credit card is in default. Some behaviors that can trigger the default penalty rate include missing a payment, having a payment returned for insufficient funds, or exceeding the established credit limit. The default penalty rate is typically the highest interest rate credit card issuers will apply. With student credit cards, the common default penalty rate hovers around 29%.

Overlimit Fee: The overlimit fee is the charge associated with exceeding the established line of credit. Not all credit cards will charge an overlimit fee and, fortunately, none of the top credit cards for students apply these fees.

Foreign Currency Transaction Fee: This is the fee charged when you use a credit card abroad. The foreign currency transaction fee for many cards can be as high as 3% per transaction. This may seem like a small amount, but for students in a study abroad program or heading out on a big trip, these fees can add up.

Using a Credit Card to Save for College

While researching student cards, I came across the Upromise World MasterCard®, which uses points to help parents save for their children’s college education. The points can be directed into savings accounts or investment vehicles.

The Upromise World MasterCard® combines elements of money management, building credit together, and long-term savings in one package.

How It Works

The Upromise World MasterCard® lets you rack up generous cash-back rewards on all sorts of everyday purchases, including dining, gas, and movie tickets. With no listed rewards caps, this is one of the better rewards programs you’ll find with any credit card, let alone a student credit card. Earn rewards up to 10%, depending on your purchase.

Your rewards get deposited into your Upromise account. From there, you can direct them to a Upromise savings account or a 529 college savings plan for college-related expenses. My colleague, Saundra, and her husband have earned almost $1,000 cash back in less than a year by making the Upromise World MasterCard® their primary credit card.

Spend to Accrue Cash Rewards

Get in the habit of using the card for all of your everyday purchases and paying off the balance. The rewards on this card are almost unbelievable for a student credit card, but you’ll have to plan in advance to maximize the rewards. Purchases from certain retailers yield more points than others.

For instance, Upromise partners with more than 800 online retailers like Best Buy and Macy’s. Rotating offers even let you can even save on certain Amazon purchases. Saundra always checks the Upromise website before making any online purchases to see whether the retailer is a Upromise partner. The site shows her every partner retailer, their rewards rate, and any coupons or deals they’re running to get maximum rewards. If the retailer is listed, she simply clicks through and makes her purchase like usual.

Just using the Upromise World MasterCard® and purchasing through the Upromise website often yields up to 10% cash back. Saundra recently booked a couple of nights at a hotel through a Upromise partner, Orbitz, over the holidays. Orbitz offered 6% cash back through Upromise.com, and Saundra added 5% on top of that by using the Upromise World MasterCard®. That yielded more than $20 cash back on a $200 expense that she would have had anyway.

Below are some of the rewards rates for retailers that are partnered with the Upromise World MasterCard®:

zStudentCC-Retailers

Upromise also partners with over 10,000 restaurants. Not all restaurants you visit will earn monster rewards, but Upromise has a nifty tool that can help you locate restaurant partners near you.

Here’s a quick search I did for restaurants in Chicago for the Upromise World MasterCard®:

zStudentCC-Restaurants

Save Cash Rewards and Grow Your Money

Once you get the hang of maxing out your rewards and spending strategically, you’re well on your way to saving more for your child’s education. The next important decision you need to make is how you want to direct your cash back for college savings.

The money you earn from your everyday spending with Upromise partners goes directly into your Upromise account. From there, you can choose to invest your earnings in a high-yield savings account or tax-deferred 529 plan. I am not a financial advisor, so I won’t recommend one course of action over another, but those two options do exist. Saundra and her husband chose the high-yield savings option, offered through Sallie Mae. They maximize their savings even more because Sallie Mae offers a 10% annual match on their Upromise savings.

Use Cash Rewards for Higher Education Expenses

As the money grows in your account and your child chooses a school, the time will come to use the cash rewards you’ve accumulated for college expenses. There are rules that govern how the money can be used from 529 plans, so consult with a financial professional. Generally, the money can be used for most college-related expenses.

There are additional options where the money can be used to pay down student debt, and it’s also possible to simply request a check that can be used for college or other expenses.

Get Friends and Family to Rack Up Points

Let’s face it: College is just plain expensive these days. One of the coolest features of this card is that you can get it for friends and family so they can also rack up rewards for your child’s education. This is perfect for grandparents or a godparent who wants to help out with school expenses. Their rewards can be directed into your child’s education account. Talk about a creative way to help out!

Research the Best Credit Cards for Students

Listed below, you’ll find a directory of the most popular student credit cards on the market. I used this directory as a starting point for my research and analysis.

The student credit cards directory is a custom directory that highlights the most important features for student cards and displays important information about each card. The directory is maintained and updated on a weekly basis to ensure it is always current.

Student Credit Cards Directory

The student credit card directory lists many student credit cards and the key information for each card. In order to value each of these cards, certain features were weighted based on the overall importance to the prospective cardholder.

Sort, filter, or search for what matters most to find the best student credit card for you.

Sort By Card Name
Rewards Tier Level
Common Filters No APR for 6+ Months
Good Ongoing Rewards
No Foreign Transaction Fee
Search Do you know of a card that is not in our directory? Suggest a Card Here
Credit Card
Annual Fee
Perks Tier Level
Foreign Transaction Fee
Rewards Tier Level
Apply Online
Credit Card
Annual Fee
Perks Tier Level
Foreign Transaction Fee
Rewards Tier Level
Apply Online
$0
None
No foreign transaction fee*
Average
* (?)
$0
None
2% USD, 3% Foreign Currency
None

Rating Methodology

The most important factors to consider when choosing a student credit card are rewards, error forgiveness, and support for financial learning. This rating is based on what I deemed the most important factors for deciding between the best student credit cards.

We used the features and corresponding data from the directory above. To better describe the data and overall rating, an explanation of each component is included below.

Rewards Rate

Rewards Rate refers to the actual rate at which you can earn rewards using the student card. The very best student credit cards offer up to 5% on select categories. The “base” rate is often 1%, but some student cards do not offer rewards at all. Some of the best cards offer rotating categories that enable you to earn 5% rewards points on a variety of common purchases each quarter. Other top cards will give you high percentages in a variety of categories with no caps on rewards.

Intro APR

An Intro APR of 0% is another important factor to consider when rating student credit cards because it gives students time to pay off an initial balance. However, introductory APRs should be used wisely and only out of necessity since it’s not a good idea to accumulate a large balance and hope to pay it off later.

The top student credit cards will offer 0% intro APR periods between six months and 12 months. The Upromise World MasterCard® has the highest 0% intro APR period of the best student credit cards at 15 months.

Error Forgiveness

Think of error forgiveness as training wheels for your credit card. Error Forgiveness encompasses certain features some credit card companies provide to give students a break if they pay late. This is very useful when you’re learning the ins and outs of credit cards. Late payments can ding your credit report, increase your APR, and cost you a bunch of cash in fees — up to $40 for each late payment.

Error forgiveness provisions aim to cut the student a break. Some companies don’t charge a late fee on the first late payment, while other companies don’t let the late payment affect the APR. It’s a feature most parents would appreciate.

Financial Learning Support

Financial learning support refers to supplemental materials or software that help a student learn about important financial concepts. For instance, the best student cards have charts and graphs so you can track, visualize, and learn from your spending data. You can see the types of items you buy most, where you’re a high spender, and how much you spend on average each month. This is a critical area where the top student credit cards add a ton of value.

Since one of the main reasons to use a student credit card is to start building your credit history, several of the good student cards provide you with your FICO credit score or other ways you can track your credit history.

About this resource:

Created on: July 13, 2017

Updated on: July 19, 2017

Edited by: Sarah Ban

Research by: Jason Steele, Mike Jelinek, Sarah Ban, Michael Gardon